In most minds, copyright infringement means illegally downloading the Game of Thrones finale or the new Beyoncé album. Last week, Disney provided a stark reminder that copyright law is much broader — and includes restrictions on publicly performing copyrighted works, even if you legally purchase a copy. Though that story appears to have a happy ending, most small businesses and even non-profit organizations can’t count on being so lucky.
WHEN DOES A PUBLIC PERFORMANCE RIGHT APPLY?
Among the bundle of rights that every copyright owner holds is the right to decide when and if a work is performed publicly. “Public” in this context means a space open to a substantial number of people outside of a normal circle of friends and family – so movie night with your friends in your living room is fine, but projecting the same movie in the park to a couple hundred strangers is not. “Public” spaces also include privately-owned spaces which are merely open to the public (like retail stores, restaurants and coffee shops), as well as semi-public places that may be restricted, but are still open to a group beyond friends and family (like offices or private clubs).
Where many small businesses get tripped up is that public performance rights cover not just movies (like the Lion King DVD that sparked the opening story), but music, including karaoke, background music, hold music on phones and live musical performances.
WHOSE PERMISSION DO YOU NEED?
In order to publicly perform a copyrighted work, you must obtain permission (called a license) from the owner of the copyright. For films, that’s typically the studio or distributor. Music is unfortunately more complicated. That’s because a piece of recorded music actually contains two separate copyrights: the copyright in the written music, and the copyright in the recorded music; and the owners are often different. For example, consider the song Hallelujah. Leonard Cohen, who wrote the song, owned the copyright in the composition, and in order to publicly perform the song you would need permission from his estate (or someone authorized to give that permission, like a music publisher). But if you wanted to play Jeff Buckley’s cover of the song, you may also need permission to play that recording, which is likely held by the record label.
To complicate things even further, due to a quirk of history, sound recordings (e.g., Buckley’s Hallelujah track) did not traditionally have a public performance right – meaning you needed permission from the Cohen estate, but not Buckley’s label, to play the track. That remains true when playing old-school recordings such as vinyl records, cassette tapes or CDs. But it is no longer true for music that’s played over the internet or using digital transmissions (i.e., streaming). If a recording is played through those means, you do need permission for both the composition and the recording.
EXCEPTIONS
So who is potentially exempt from needing a public performance license? Not as many as you would think.
Establishments are permitted to display broadcast television and radio, as long as they don’t exceed certain thresholds for square footage and number of TVs/speakers (which is why bars and restaurants are permitted to show sporting events). But because this exemption only applies to broadcasts, it doesn’t provide an exemption for modern music streaming such as Pandora, Spotify or Apple Music. In fact, the terms and conditions for consumer music streaming services specifically prohibit using the services in a commercial setting – so not only is it copyright infringement to do so, it’s a breach of your agreement with the service.
There are also some exceptions for educational purposes (such as a teacher showing a documentary in class), and for certain types of works if the performance is for a non-profit purpose and either there is no admission fee, or all of the admission proceeds are used for charitable purposes. But as our opening story demonstrates, not all educational or non-profit uses are permitted.
HOW DO YOU GET PERMISSION?
The good news is that obtaining permission to publicly perform works is often easier than you think. In the case of music, most songwriters join performing rights organizations such as ASCAP, BMI and SESAC. Those organizations in turn sell blanket licenses that cover all of their members for a single monthly or annual fee. Pricing is dependent on the type of business and size, so small businesses typically pay less than big corporations. By getting licenses with each of the major organizations, you’ll be covered for most songs. To make things even easier, you can subscribe to a service that obtains licenses from all of the performing rights organizations for you for a single fee.
Of course, that only covers performing rights, and not digital recording rights if you want to use streaming service. Fortunately, there are several services – including, soon, Spotify and Apple Music – who offer versions of streaming products specifically designed and licensed for commercial settings.
Finally, you can also play music from local artists, who can directly give you permission – just make sure you are getting permission from both the songwriters and the performers, and that they aren’t including covers they don’t have the right to give you in the first place.
Films can similarly be licensed through rights organizations, who may charge an annual fee (if your organization does regular movie nights) or a per-event fee. Non-profit organizations can sometimes obtain special, more inexpensive licenses to publicly show documentaries and feature films, though the permission may be subject to certain restrictions (for example, they may have to agree not to charge admission).
WHAT’S THE RISK OF NOT GETTING PERMISSION
The risk is that you are infringing someone’s (maybe multiple someone’s) rights, and there are consequences to doing so. Setting aside the morality of using someone else’s work without permission and without paying, the performing rights societies make it a point to enforce these rights, sending undercover scouts to venues to check for unlicensed uses and filing hundreds of copyright infringement lawsuits annually (including recent cases against a Bend tavern and two Portland bars). If you are caught, then at a minimum the rights holder is going to want you to retroactively pay the license fee (and maybe a penalty), and if they file a lawsuit you may be on the hook for statutory damages of between $750 and $30,000 per copyright, as well as needing to pay the other side’s attorneys’ fees (which may well cost six figures or more).
Enforcement has become so pervasive that Oregon recently passed a law regulating the way that performance rights organizations demand licenses and payments. The law prevents the organizations from engaging in over-the-top practices like causing a scene in a restaurant to try to force an owner to pay, or deceiving someone into signing a licensing contract, but it doesn’t prevent the organizations from enforcing copyrights or investigating infringements.
The bottom line is that getting permission to publicly perform music and films is usually required for businesses of all types, and is not overly expensive or difficult. On the other hand, the cost of not getting permission can be quite high. You may be familiar with the saying “it is better to ask forgiveness than permission.” That can be a pretty risky attitude when it comes to copyright infringement.